The Zhitong Finance App learned that Bank of America Securities released a research report stating that it reaffirmed Chow Tai Fook's (01929) “neutral” rating. The target price was lowered from HK$13.2 to HK$12.1 to reflect that profit growth in the 2025 and 2026 fiscal years was slower than the long-term average due to the slow growth rate of Chow Tai Fook's POS retail system. The company's operating data for the fourth quarter of fiscal year 2024 fell short of the bank's and market expectations. The bank expects the company's same-store sales growth in March to slow down from the same year-on-year level in January and February of this year. The number of store closures in the Mainland was also higher than expected during the period.
The bank believes that a rise in gold prices may not necessarily be beneficial to Chow Tai ?$#@$. It also indicates that a sudden surge in gold prices may cause consumers who want to wait for the price of gold to normalize to delay purchases, dragging down transaction volume. It was also pointed out that the rise in gold prices may have a positive impact on the company's gross margin in the short term, but the relevant impact is only temporary and may be offset by realized or unrealized losses from Chow Tai Fook's gold loans (expected to be hedged by 50%). In addition, management maintained the 2024 fiscal year guidance for revenue growth of around 10% and operating profit growth of 20%. In fiscal year 2025, there was a net increase in the number of target stores, and it was emphasized that its focus was on improving POS productivity.